Keywords: antitrust law; merger control; horizontal M&A; market power
JEL classification: G14; G34
학회소식
[2022년 제4차 융합학술대회]The Effects of Antitrust Laws on Horizontal Mergers: International Evidence
작성자 : 관리자
조회수 : 238
게시일 :
2022-12-19
This study examines how an antitrust law enactment affects merger and acquisition (M&A) performance, especially focusing on M&As occurred within industry. Using the staggered introduction of competition laws across 20 countries, we find an antitrust law adoption decreases an acquirer’s 5- day cumulative abnormal returns surrounding a horizontal merger announcement, compared to those in the benchmark groups. The law adoptions are effective in empowering a regulatory agency and deterring anticompetitive mergers and cross-company coordination. The subdued gain from a horizontal merger under antitrust laws is driven by the lower potential for post-merger monopolistic gain, evidenced by decreases in deal value, target book asset, and announcement returns of an acquirer’s industry-peers. The change in post-merger cost efficiency or agency problems under merger control does not explain our results. Overall, we find that antitrust policies are effective in deterring post-merger monopolistic gain, potentially improving customer welfare.
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